Maximum retail price

A maximum retail price (MRP) is a manufacturer calculated price that is the highest price that can be charged for a product sold in India and Bangladesh.[1][2] However, retailers may choose to sell products for less than the MRP. MRP differs from systems using a recommended retail price because in those systems the price calculated by the manufacturer is only a recommendation, not enforceable by law.

All retail products in India must be marked with MRP. Shops cannot charge customers over the MRP. Some shops may charge slightly below MRP to draw more customers to their stores. In some remote areas, tourist spots, and in situations where a product is difficult to obtain, consumers are often charged illegally over the MRP.[3]

In April 2015, it was reported that milk vendors in Mumbai were threatening a boycott after it was discovered they had been charging above MRP and the Maharashtra state government threatened to intervene.[4]

Criticism

The concept of Maximum Retail Price has been criticised as incompatible with the free market system, because it involves manufacturers deciding what profit retailers will make.[5] It is easy to get around the MRP by charging for 'services' on top of the item price, such as a 'cooling charge' for cold drinks, or by manufacturers setting the MRP at up to ten times the expected sale price. The MRP also hurts consumers in rural areas because if retailers cannot charge a higher price to make up for the higher price of transportation and distribution to those areas, they may simply not stock many items.[5]

See also

References

  1. ↑ "MRP: Maximum Retail Price for Packaged Goods in India". fullstopindia. Retrieved 23 April 2015.
  2. ↑ {{cite web|url=http://print.thefinancialexpress-bd.com/2014/11/27/68117/print |title=VAT on commissions for drug sales raised |quote=The NBR policy guidelines say the drug administration will set the maximum retail price of drugs based on the trade price
  3. ↑ "New law in making to punish vendors charging over MRP". The Indian Express. Retrieved 12 October 2016.
  4. ↑ "Milk vendors charging more than MRP threaten boycott". Times of India. Retrieved 23 April 2015.
  5. 1 2 "Time to abolish the MRP". 23 July 2015.
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